Weather, consumer confidence play major roles in Hat real estate jump
A sluggish winter for homesellers in Medicine Hat could be turning a corner in May thanks to “good news and good weather” according to the head of the Medicine Hat Real Estate Board.
Board president Tim Seitz told the News on Monday that the still-recovering economy and interest rate changes added to winter blues in homebuyers’ market in the first four months of 2018.
“We had such a long, ugly winter that people just weren’t out buying,” said Seitz. “Last month, we were definitely down, but for May we’re up about 15 or 20 per cent.”
With 65 sales as of Monday, the month is tracking to be the second best month of May in the last seven year, and close to equalling a record sales total in May 2014.
“Things are starting to pick up, and I’d attribute that partly to the weather... but people are just way more confident,” said Sietz.
Over the last eight weeks the City of Medicine Hat has announced to major power sales two new industrial customers looking to establish facilities in Medicine Hat. Commercial construction is booming, and as well a higher price for oil has led to more activity in the oil patch.
The result, said Sietz, is greater optimism that could be now counteracting a slow sales season caused by long winter, a two-year recession, higher interest rates and new mortgage qualification standards.
“People are just more optimistic that they’ll be working, and that affects their decisions,” he said.
However, like new mortgage calculations, the eventual effect will play out over some time, he said, noting that industrial expansions are months away from operating.
“Higher interest rates will add something like $30 a month to a payment for a typical home in our market, but it takes time for people to become acclimatized to (news that) rates are rising,” he said.
Figures for April show $32.3 million in receipts as 116 properties in all classes changed hands. That is about $8 million less and 25 fewer sales than were recorded in April 2017. For the year, total sales are down 10 per cent in value and 16 per cent in number.
Specific to single family homes in April, 79 were sold for a total of $23.5 million, bringing the year-to-date average selling price to $309,500, up slightly from this point last year.
Similarly, condo townhouse and other residential unit sales were fewer, but more valuable. Last month, $6.75 million was realized on 32 transactions — a drop of about 25 per cent — while the average unit price rose about 5 per cent to $228,100 for the first four months of 2018.